Maersk Oil has started drilling on its first production well in the Culzean gas field in the UK North Sea.

The Danish firm plans to drill six production wells in the high pressure/high temperature (HPHT) field which qualified for the HPHT Cluster Area Allowance introduced in the 2015 Budget.

The allowance reduces the amount of adjusted ring fence profits subject to the Supplementary Charge, with the portion of profits reduced by the allowance dependent on a company’s capital spend on cluster area oil and gas projects.

The £3 billion Culzean gas field development is being led by Maersk along with partners JX Nippon and BP (Britoil).

Culzean, which was discovered in 2008, is believed to hold around a quarter of billion barrels of oil equivalent, and at its peak, expected in 2020, is expected will produce enough gas to meet five per cent of total UK demand.

First gas from the six well production development is expected in 2019.

Gretchen Watkins, from Maersk Oil, said: “This is an important milestone in ensuring that we can deliver Culzean on schedule, and with it five per cent of UK gas demand in 2020-21.”